| Zero Down Mortgages |
| You've probably more than once have heard the phrase "zero down" if you're considering buying a home. There are many great programs available that can help you purchase a home without having a significant amount of money to do so. Sometimes when you are buying a home with 100% financing, you need to be aware that some programs will not allow you to incorporate your closing cost, you may need to bring in some cash at closing unless the Seller is allowed to contrtibute funds to certain closing costs. Here are just a few samples to consider: Typically, for a true zero down mortgage, your loan amount may be 103% of the sales price (that extra 3% covers the closing costs and prepaids--taxes, insurance and prorated interest). With the 103% mortgages, usually better credit is required and the debt to income ratios are pretty strict. Private mortgage insurance is required with this program. A terrific new program that Mortgage Master has available allows buyers to finance 100% of the sales price with either a competitive adjustable rate or fixed rate program. Good credit is fine and the seller can contribute up to 3% of your closing costs and prepaids. This program is favorable because there are no prepayment penalties and it features "common sense" underwriting in addition to allowing a higher debt to income ratio than traditional 100% financing programs. Private mortgage insurance is required with this program or a higher interest rate (which is tax deductable, unlike private mortgage insurance) can be selected in lieu of private mortgage insurance. There are also many 80/20 programs available which provides 100% financing. With an 80/20, there are two mortgages: the first mortgage is at 80% of the sales price and the second mortgage is at 20% of the sales price. Usually, depending on the program you opt for, the interest rates on these programs, especially the second mortgage, are higher and are based on credit. However, because the first mortgage is at an 80% loan to value, there is no private mortgage insurance. The interest on both mortgages are tax deductable. At Mortgage Master Service Corporation, we are please to offer several different scenarios for buying your home with little cash out of your savings. To find out which program is best suited for you, contact Rhonda Witt, your personal Mortgage Consultant, today. |
 |
 |